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September 11, 2003

Tuition Hikes, Operating Budget Request Top UA Regents’ Agenda

September 11, 2003 NR11-03

Regents of the University of Alaska will begin considering an administration recommendation to ask the governor and legislature for a 5% increase in operating funds for the ’05 fiscal year when it meets next week in Palmer.

The $10.5 million increase in state funding would cover approximately half of the fixed cost needs the university will be facing in the next fiscal year including negotiated salary increases, health care cost increases, and operating costs of new facilities coming on line. Additional funding would also allow expansion of much needed nursing and allied health programs. The balance of fixed costs funding in the proposed budget would come from non-general fund revenues including tuition and other university receipts. The administration will be asking the regents to approve a 10% increase in tuition rates for each of the next two years.

The regents will meet Wednesday and Thursday, Sept. 17 and 18, on UAA’s Mat-Su Campus near Palmer. Public testimony will be heard in two sessions, both in Room 204 of the Fred & Sarah Machetanz Building. The first session will be Wednesday morning from about 10 to11 a. m. and the second will be Thursday morning from about 9 to10 a. m.

Last year the board approved a 10% tuition hike for the current academic year (04), and deferred consideration of a similar increase for next year. University President Mark Hamilton is proposing 10% increases for each of the next two years, inclusive of the inflation adjustment. From 1995 to 2002, tuition at the university increased each year, but only by the rate of inflation, about 3.5%. During the same period, the average increase nationally was just over 7%, or about twice the rate of higher education inflation.

Public four-year colleges and universities in 49 states increased tuition this year, ranging from 1.7% in Montana to 39% in Arizona. Only Mississippi kept tuition at 2002 levels.

The administration is also proposing a 10% increase to the non-resident surcharge for ‘05 and ‘06. Over the years, the UA non-resident surcharge rate has been at a level far below the average of similar institutions. In a sample of 16 four-year public institutions for ‘03 only North Dakota and South Dakota charge less non-resident tuition than the University of Alaska.

Hamilton is also recommending that the regents approve a policy change that extends from one to two years the time a student would need to be physically present in Alaska before qualifying for in-state tuition rates. Although some states prohibit students from qualifying for in-state tuition if their primary purpose for residing in the state is educational, Hamilton said he believes that moving to a two-year requirement at this time is appropriate for Alaska.

This year it is estimated that student tuition and fees will generate $68.8 million, and next year’s increase, if implemented, is estimated to raise an additional $9.2 million.

Lower Division Upper Division

Current Tuition Rate AY2004

Proposed Tuition RateAY2005

Proposed Tuition Rate AY2006

PWSCC

77

85

94

Kodiak

78

86

95

All Others

90

99

109

102

112

123

Graduate

202

222

244

Non Resident Surcharge*

191

231

280

Regents also will discuss the university’s operating budget request to the state for FY05. Last year, the university received $215.6 million from the state general fund, about $4.6 million more than the year before. It requested an increase of about $13.5 million.

The administration is recommending that the university seek $226.1 million for FY05, an increase of 5% or $10.5 million. The increase would cover about half of the university’s fixed costs ($9.8 million) and $650,000 for expanding nursing and health programs. Final board consideration of the university’s operating and capital budget request will occur at a board meeting scheduled for November 6.